United Online to Complete Tax-Free Spin Off of FTD on November 1, 2013

October 01, 2013 09:29 AM Eastern Daylight Time

WOODLAND HILLS, Calif.--(BUSINESS WIRE)--United Online, Inc. (Nasdaq: UNTD) today announced that the U.S.
Securities and Exchange Commission has declared the FTD Companies, Inc.
(“FTD”) Registration Statement on Form 10 effective and that United
Online’s board of directors has approved the separation of FTD from
United Online through a tax-free dividend involving the distribution of
all FTD common stock held by United Online to United Online’s
stockholders on November 1, 2013. United Online’s board of directors
also determined to implement the previously announced one-for-seven
reverse stock split of shares of United Online common stock immediately
prior to the spin off of FTD. As a result, the following will occur:

FTD common stock will be distributed at 12:01 a.m. Eastern Daylight
Time (“EDT”) on November 1, 2013 to United Online stockholders of
record as of the close of business on October 10, 2013.

United Online stockholders will receive one share of FTD common stock
for every five shares of United Online common stock they hold on the
record date (prior to giving effect to the reverse stock split of
United Online shares).

United Online will effect a one-for-seven reverse stock split of
United Online common stock, which will become effective at 11:59 p.m.
EDT on October 31, 2013.

Following completion of the spin off, FTD will be an independent,
publicly-traded company on the NASDAQ stock exchange, called FTD
Companies, Inc., utilizing the symbol: “FTD”. The FTD Companies business
will consist of both the domestic and international operations of United
Online’s FTD segment and include the highly-recognized FTD®and Interflora®brands, both supported by
the Mercury Man logo that is displayed in approximately 40,000 floral
shops worldwide. United Online will continue to operate the businesses
of the company’s Content & Media and Communications segments, supported
by the Classmates®, StayFriends™, MyPoints®,
NetZero®, and Juno® brands.

“The previously-announced spin off of FTD already has unlocked
significant value for the benefit of our stockholders, and we continue
to believe that the spin off will add operational and strategic
flexibility for both FTD and United Online and better position the
companies to capitalize on their well-recognized brands, while further
enhancing stockholder value,” said Mark R. Goldston, Chairman, President
and Chief Executive Officer of United Online. “We expect FTD to realize
the benefits of being a pure-play, publicly-traded international premier
floral and gifts products and services company and to continue to
capitalize on the significant improvements we have made to the business
over the past five years. We are excited about FTD’s future as an
independent, publicly-traded company and are very grateful to the team
at United Online for the guidance and support they have provided since
the acquisition of FTD by United Online in August 2008,” said Robert S.
Apatoff, President of FTD.

Reverse Stock Split of United Online Shares of
Common Stock

As stated above, immediately prior to the distribution, United Online
will effect a one-for-seven reverse stock split of United Online common
stock. United Online common stock will trade on a post-reverse stock
split basis when the NASDAQ stock market opens on November 1, 2013. As a
result of this action, every seven shares of United Online common stock
will be converted into one share of United Online common stock. United
Online’s stockholders had previously authorized United Online’s board of
directors to implement the reverse stock split at the September 5, 2013
special meeting of stockholders.

United Online stockholders will not receive fractional shares in
connection with the reverse stock split. Instead, the transfer agent
will aggregate all fractional shares and sell them as soon as
practicable after the effective time of the reverse stock split at the
then-prevailing prices on the open market, on behalf of those
stockholders who would otherwise be entitled to receive a fractional
share. Stockholders will receive a cash payment from the transfer agent
in an amount equal to their respective pro rata shares of the total net
proceeds of that sale.

Distribution of FTD Shares to United Online
Stockholders

As stated above, United Online stockholders of record as of the close of
business on October 10, 2013, the record date for the distribution, will
receive oneshare of FTD common stock for every five shares of
United Online common stock they hold on the record date. For example,
for every 35 shares of United Online common stock that a United Online
stockholder holds on the October 10, 2013 record date, such stockholder
would hold 7 shares of FTD common stock and 5 shares of United Online
common stock immediately following the distribution and reverse stock
split.

No action is required by United Online stockholders to receive the
shares of FTD common stock in the distribution. An information statement
containing details of the spin off and important information about FTD
will be mailed to United Online stockholders on or about October 4,
2013. Stockholders who hold United Online common stock on the record
date will receive a book-entry account statement reflecting their
ownership of FTD common stock or their brokerage account will be
credited with the FTD shares.

Fractional shares of FTD common stock will not be distributed to United
Online stockholders. Instead, the fractional shares of FTD common stock
will be aggregated and sold in the open market, with the net proceeds
distributed pro rata in the form of cash payments to United Online
stockholders who would otherwise hold FTD fractional shares.

United Online has received a favorable tax ruling from the U.S. Internal
Revenue Service approving the tax-free status of the spin off, and
expects to receive an opinion of counsel on the distribution date,
November 1, 2013, that the distribution of FTD common stock to United
Online stockholders qualifies as a tax-free distribution for U.S.
Federal income tax purposes, except with respect to cash received in
lieu of fractional shares. Non-U.S. stockholders may be subject to tax
on the distribution in jurisdictions other than the U.S. United Online
stockholders are urged to consult their tax advisors regarding the
particular consequences of the distribution in their situation,
including the applicability and effect of any U.S. Federal, state,
local, and foreign tax laws.

Trading of United Online and FTD Common Stock

Beginning on or shortly before the October 10, 2013 record date and
continuing up to the distribution date of November 1, 2013, United
Online expects that its common stock will trade in two markets on
NASDAQ: a “regular-way” market and an “ex-distribution” market. A
stockholder of record of shares of United Online common stock as of the
record date may choose to sell those shares in the “regular-way” market
after the close of business on the record date and up to the
distribution date, in which case the stockholder will also be selling
the right to receive shares of FTD common stock in the distribution.
Shares of United Online common stock that trade on the “regular-way”
market will trade under the ticker symbol “UNTD.” However, a stockholder
of record of shares of United Online common stock as of the record date
may also choose to sell those shares in the “ex-distribution” market
after the close of business on the record date and up to the
distribution date, in which case the stockholder will still receive the
shares of FTD common stock that the stockholder would be entitled to
receive in the distribution because of the stockholder’s ownership of
United Online common stock. Shares of United Online common stock that
trade on the “ex-distribution” market will trade under the ticker symbol
“UNTDV.”

FTD common stock is expected to begin trading on a “when-issued” basis
on NASDAQ under the ticker symbol “FTDDV” on or shortly before the
record date of October 10, 2013. Beginning on the distribution date of
November 1, 2013, any “when-issued” trading with respect to FTD common
stock will end, and “regular-way” trading will begin under the ticker
symbol “FTD.” Investors are encouraged to consult with their financial
advisers regarding the specific implications of buying or selling United
Online or FTD common stock prior to the distribution date.

The completion of the FTD distribution is subject to the satisfaction or
waiver of a number of conditions, including the Registration Statement
on Form 10 for the FTD common stock being declared effective by the
Securities and Exchange Commission, the FTD common stock being
authorized for listing on NASDAQ and certain other conditions described
in the Information Statement included in the Form 10 and in the
agreements filed as exhibits to the Form 10. The condition relating to
the authorization of the FTD common stock for listing on NASDAQ has been
satisfied, and the Securities and Exchange Commission declared the Form
10 effective today. United Online and FTD expect all other conditions to
the FTD distribution to be satisfied on or before the distribution date.

Post-Separation Dividend Policies of United
Online and FTD

Following the separation, FTD currently intends to retain future
earnings, if any, to reinvest in the growth of its businesses and to
make interest payments on or pay down its debt, fund potential
acquisitions and potentially repurchase its common stock. As a result,
FTD does not currently expect to pay any cash dividends.

United Online currently expects to pay a dividend of $0.15 per share in
the fourth quarter of 2013 (after taking into account the one-for-seven
reverse stock split). Declaration and payment of such dividend and
future dividends will be at the discretion of the board of directors of
United Online and will depend on, among other things, United Online’s
results of operations, cash flow, cash requirements, investment
opportunities, financial condition, contractual and regulatory
restrictions, and other factors that United Online’s board of directors
may deem relevant. Additionally, the board of directors of United Online
has extended the company’s previously-approved $80,000,000 stock
repurchase program through December 31, 2014.

About United Online®

United Online, Inc. (Nasdaq: UNTD), through its operating subsidiaries,
is a leading provider of consumer products and services over the
Internet, where their respective brands have attracted a large online
audience that includes more than 100 million registered accounts
worldwide. United Online’s FTD segment provides floral-related products
and services (FTD, Interflora, Flying Flowers, and Flowers Direct) for
consumers and retail florists, as well as other retail locations
offering floral and related products and services. United Online’s
Content & Media segment provides online nostalgia products and services
(Classmates and StayFriends) and online loyalty marketing (MyPoints).
Its primary Communications segment service is Internet access (NetZero
and Juno), including 4G mobile broadband (NetZero Wireless).

Cautionary Information Regarding
Forward-Looking Statements

This press release contains “forward-looking statements” within the
meaning of applicable federal securities laws. These statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and generally include words such as
“believes,” “expects,” “intends,” “anticipates,” “estimates” and similar
expressions. We can give no assurance that any future results or events
discussed in these statements will be achieved. Any forward looking
statements represent our views only as of today and should not be relied
upon as representing our views as of any subsequent date. Readers are
cautioned that such forward-looking statements are subject to a variety
of risks and uncertainties that could cause our actual results to differ
materially from the statements contained in this release. Such
forward-looking statements include, but are not limited to statements
about the separation of United Online into two independent,
publicly-traded companies; the terms, timing and effect of the
separation on United Online, its stockholders, customers and employees;
the capitalization of United Online and FTD; the future operational,
strategic and financial flexibility of United Online and FTD; other
possible results of the distribution and reverse stock split; and the
post-separation dividend policies of United Online and FTD. Many of
these risks and uncertainties are based on factors that cannot be
controlled by United Online and include, but are not limited to (1)
market conditions in general and those applicable to the distribution
and reverse stock split; (2) factors affecting the expected timeline for
completing our separation into two public companies; (3) the effect our
separation and the reverse stock split may have on United Online’s stock
price; (4) the risk that the anticipated benefits from the distribution
and reverse stock split may not be fully realized or may take longer to
realize than expected; (5) tax and regulatory matters; and (6) changes
in economic, competitive, strategic, technological, regulatory or other
factors that affect the operation of United Online’s businesses. A
detailed description of other risks and uncertainties affecting United
Online is contained in Item 1A of United Online’s 2012 Annual Report on
Form 10-K filed with the SEC on March 4, 2013, in Item 1A of FTD’s
Registration Statement on Form 10, as amended, initially filed with the
SEC on April 30, 2013, in Item 1A of United Online’s Quarterly Reports
on Form 10-Q, and in its other filings with the SEC. These filings are
available for free on the SEC’s website at www.sec.gov,
and United Online’s filings are also available for free on the company’s
website at www.unitedonline.com.
United Online undertakes no obligation to publicly update any
forward-looking statement or risk factor, whether as a result of new
information, future events or otherwise.